Victoria Crone, Xero New Zealand managing director. Photo / Brendon O'Hagan
When Victoria Crone was sounded out for a heavy-hitting board role, she had just one question: "What is your appetite for change?"
The response told the Xero New Zealand managing director everything she needed to know.
"They rang back and said, 'Perhaps you won't be right'.
"And I'm like, 'Definitely, I wouldn't be right'."
She says that without a desire to reinvent its business, the company in question was facing death by 1000 cuts.
Crone, who sits on four other boards as well as that of Xero NZ, says the personal risk profile for directors today is very high, potentially leading to directors baulking at business risk.
"That's a real concern for our companies because for innovation you have to take risks to create outcomes.
"If you want to build new markets and new revenue sources for your organisation, you have to take risks."
While this widespread risk aversion has made Crone question whether governance is the place for her, she has connected with New Zealand companies that do value her approach.
Crone's first steps down the governance path were taken several years ago at the invitation of some former colleagues.
The board had a dynamic she liked and an appreciation of the skills in technology, marketing and leadership she brought to the table.
Crone says her passion for small-to-medium-sized businesses means she seeks out those roles.
"Bringing governance to small businesses and more experience and challenging of thinking can only be good for those types of businesses."
While her focus might be at the SME end of the business spectrum, Crone would like to see boards of bigger companies step up when it comes to the question of diversity.
As well as a low risk appetite, she sees the lack of diversity around the board table as constraining business growth.
Not only is there solid evidence to show diversity can boost business profits and performance, but the marketplace, even locally, is rapidly changing, she says.
"The nature of our workforce and our customer bases are diversifying very fast and I do believe you need diversity at the top to relate to that."
Crone says boards need to "loosen up" and accept that even though someone may not look as though they have 40-plus years of experience under their belt, that doesn't mean they can't contribute at a board level.
Often, the face of diversity is a woman in her 50s or 60s, which Crone says ignores the wealth of talent several decades younger, and with a completely different appreciation of the impact of technology on a business.
While the core governance skills involving risk, regulation and financial understanding are always necessary, the way businesses are increasingly being shaped by technology means this knowledge needs to be supplemented with digital and innovation skills, she says.
"You look at the performance of some of our larger companies, and I'm certainly not belittling them, however a lot of the performance doesn't come from revenue growth, it comes from cost out, and that is only a short-to-medium sustainable strategy.
"If you're not growing your revenue above GDP, then your chances of your company failing [within] the five- to 10-year period go up significantly and I think that really where diversity plays a role is by thinking about your market differently, bringing a different lens to it and bringing some risk appetite to it."
Crone says Sky TV and Spark are good examples of boards that have brought on more digital experts.
Sky TV last year appointed high-profile entrepreneur Derek Handley and technology executive Geraldine McBride to its board.
Spark replaced ad man Kevin Roberts with United States entrepreneur Ido Leffler.
Roberts responded to commentators' grumbles that Leffler had no telco or New Zealand business experience by saying: "I [would] hope he doesn't fit into a role in the New Zealand telco space because what would be the point? You've got tons of that [on the board]".
And seeding a board with one person offering a different perspective won't flip the switch, says Crone.
Boards do a lot of discussing different perspectives and opinions, so one person offering an alternative view can be acknowledged without being accepted, she says.
"It's the weight of different opinions when you have more than one person.
"I mean, I think by the time you get to the boardroom you're more than confident to speak up so it's not an issue around 'Okay, I don't want to speak up because there are nine men in the room'.
"Often because what you're saying is quite different - is it going to be embraced or not?"
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